Critical U.S. wheat market at risk

EDITOR’S NOTE — Following is a statement from U.S. Wheat Associates President Alan Tracy and National Association of Wheat Growers Chief Executive Officer Dana Peterson:

“The Canadian parliament has ratified a bilateral free trade agreement (FTA) with Colombia that will, when implemented, allow Canadian wheat to enter that country duty free.

“The agreement gives a major wheat-producing competitor an immediate price advantage in a market where U.S. wheat exports had earned a dominant market share. It means that U.S. wheat producers could lose sales worth $70 million today to Canada at a time when they can least afford it. In fact, U.S. farm families now face losing a substantial portion of agricultural exports to Colombia worth nearly $1.7 billion, including $330 million in wheat exports, in 2008. Even more disturbing is the fact that our farmers should never have faced this dilemma.

“That is because while the United States government has failed to ratify a bilateral FTA it negotiated with Colombia in 2006 that would allow most American agricultural exports to enter Colombia duty free, Canada has moved ahead with its own trade agenda.

“For four years, U.S. Wheat Associates (USW), the National Association of Wheat Growers (NAWG), and many other agricultural organizations have strongly advocated for this agreement. In that time, USW brought influential Colombian millers to the United States who told government officials that if they had to pay duties on U.S. wheat and not on Canadian wheat, U.S. sales and market share would fall dramatically. USW also released a report on the impact of FTAs that showed U.S. wheat exports would be 20 million bushels greater and the farm price would be 10 cents per bushel higher under a ratified U.S.-Colombia FTA. The outcome of this situation should come as no surprise.

“As an industry dependent on exports for half its sales, export opportunities and free trade are essential. We were encouraged to hear President Obama’s plans to give trade a more prominent role in his administration’s economic recovery agenda and his goal to double exports in five years. We were particularly pleased that the President recognized that U.S. inertia on trade only allows other nations to fill the void while we lose the chance to create jobs on our shores. We urged the administration to commit to this initiative by submitting the U.S.-Colombia FTA, and pending agreements with South Korea and Panama, to Congress for consideration.

“Recently, we have seen some positive steps on trade. President Obama has now pledged to send the Korea-U.S. FTA to Congress by the November G-20 meeting in Seoul. Last week, the House Agriculture Committee passed H.R. 4645, the Travel Restriction Reform and Export Enhancement Act. If signed into law, it would clarify how U.S. farmers and agricultural businesses conduct sales to Cuba and remove long-standing travel restrictions, which together have significantly constrained wheat growers' market share there.

“Such steps are encouraging, but do not carry us far enough. Today, 126 trade agreements are being negotiated that exclude the United States, yet each involves current U.S. trading partners. If the likely fallout from the Canada-Colombia FTA is any indication, such agreements represent a grave threat to our economic recovery.

“We must change the situation and give American farm families and our rural economy a fighting chance. We urge the Administration and Congress to resolve any remaining issues with our Colombia and Panama FTAs and move the agreements forward to approval as soon as possible.”